Dr. Suresh Venkatesan reports

POET TECHNOLOGIES REPORTS FIRST QUARTER 2024 FINANCIAL RESULTS

Poet Technologies Inc. has released its unaudited condensed consolidated financial results as of and for the three months ended March 31, 2024. The company's financial results, as well as the management's discussion and analysis (MD&A), have been filed on SEDAR+ in Canada and EDGAR in the United States. All financial figures are in U.S. dollars unless otherwise indicated.

First quarter and recent business highlights:

• Participation at the Optical Fiber Conference (OFC) held in San Diego in mid-March represented a major commercial turning point for the company, with the announcement of its first entry into the optical module market for artificial intelligence and cloud data centre markets with an 800G pluggable transceiver.
• The company also announced four new products at OFC all directed at the AI (artificial intelligence) market, including an 800G transmit optical engine chiplet (200G/lane) that is a fundamental building block for 1.6T and 3.2T pluggable transceivers and an eight-channel packaged light source for C-band and O-band wavelengths for chip-to-chip data communications for AI systems and co-packaged optics for the data centre market.
• To support its entry into the high-speed optical transceiver market, the company announced a collaboration with MultiLane Inc., a leading provider of high-speed IO and data centre interconnect test solutions, to develop next-generation, performance-optimized pluggable 800G, 1.6T and higher-speed transceivers.
• Marking the company's success in launching its newly designed transmit and receive optical engines, the company recently announced a major design win and collaboration with Foxconn Interconnect Technology (FIT) to develop 800G and 1.6T pluggable optical transceiver modules for sale by FIT using Poet optical engines with an aim to address the growth in demand for cutting-edge AI applications and high-speed data centre networks.
• To provide the development financing needed to address the increased demand for its products, the company completed a series of previously announced non-brokered private placements since Jan. 1, 2024, which added a total of approximately $26.4-million (Canadian) to its balance sheet. In addition, over the same period, the company sold 4,947,679 common shares through its at-the-market (ATM) offering in the United States through Craig-Hallum LLC using the facilities of the Nasdaq Capital Market at an average price of $2.17 (Canadian), for gross proceeds of approximately $10.8-million (Canadian).
• As of May 15, 2024, the company had cash and cash equivalents of $23.6-million (U.S.) and working capital of $22.8-million (U.S.). There were 60,485,477 issued and outstanding common shares.

Management comments

"Our team embarked on a dynamic first quarter preparing for the Optical Fiber Conference (OFC) held in San Diego in mid-March," stated chairman and chief executive officer Dr. Suresh Venkatesan. "We could not have guessed at the time that those efforts would lead to a collaboration with Foxconn, one of the world's leading electronics manufacturing companies to include our optical engines in their 800G and 1.6T optical module products. We are proud to have been selected for their advanced module designs and we look forward to supplying FIT and its global customer base, which includes the largest consumers of optical modules in the AI market. At OFC, we showcased four new products, each of which garnered serious attention from the industry, with the strongest interest in our leading-edge optical engine technology that powers optical modules for AI processing clusters, and in our light-source products that facilitate chip-to-chip light-based data communications and high-speed computing. In addition to Foxconn, we are expanding our previously announced relationship with Luxshare, to include additional optical module products, and collaborating with MultiLane, a key supplier of high-speed test equipment in the industry to offer 800G and 1.6T optical modules. The enthusiastic reception from OFC helped us to secure multiple successful capital raises from institutional investors committed to our company's success. The additional capital fortifies our financial foundation as we navigate the next phase of our growth."

Non-IFRS (international financial reporting standards) financial summary

The company reported non-recurring engineering revenue (NRE) of $8,700 in the first quarter of 2024, compared with $181,000 for the same period in 2023 and $108,000 in the fourth quarter of 2023. In the first quarter, the company provided under NRE contract services to multiple customers, one of which continued to contract services from last year. The revenue relates to unique projects that are being addressed utilizing the capabilities of the Poet Optical Interposer.

The company reported a net loss of $5.7-million, or 12 cents per share, in the first quarter of 2024, compared with a net loss of $5.3-million, or 14 cents per share, for the same period in 2023 and a net loss of $5.5-million, or 13 cents per share, in the fourth quarter of 2023. The net loss in the first quarter of 2024 included research and development costs of $1.9-million, compared with $2.3-million for the same period in 2023 and $2.1-million in the fourth quarter of 2023. Fluctuations in R&D (research and development) for a company of this size and this stage of growth is expected on a period-over-period basis as the company transitions from technology development to product development.

Non-cash expenses in the first quarter of 2024 included stock-based compensation of $900,000 and depreciation and amortization of $500,000. Non-cash stock-based compensation and depreciation and amortization in the same period of 2023 were $1.2-million and $500,000, respectively. Fourth quarter 2024 stock-based compensation and depreciation and amortization were $1.0-million and $500,000, respectively. The company had non-cash finance costs of $20,000 in the first quarter of 2024, compared with non-cash finance costs of $10,000 in the first quarter of 2023 and non-cash costs of $14,000 in the fourth quarter of 2023.

The company recognized other income, including interest of $53,000 in the first quarter of 2024, compared with $78,000 in the same period in 2023 and $54,000 in the fourth quarter of 2023.

The company reported non-cash fair value adjustment to derivative warrant liability of $600,000 in the first quarter of 2024, compared with nil in the same period in 2023 and $25,000 in the fourth quarter of 2023. This non-cash item relates to warrants issued in a foreign currency and is periodically remeasured.

Cash flow from operating activities in the first quarter of 2024 was negative $4.6-million, compared with negative $3.6-million in the first quarter of 2023 and negative $2.9-million in the fourth quarter of 2023.

From Jan. 1, 2024, to date, the company received gross proceeds of $28.5-million through the issuance of units from multiple private placements, issuance of common shares using its ATM (at the market) and the issuance of common shares from the exercise of warrants.

Non-IFRS financial performance measures

Certain financial information presented in this news release is not prescribed by IFRS. These non-IFRS financial performance measures are included because management has used the information to analyze the business performance and financial position of Poet. These non-IFRS financial measures are intended to provide additional information only and do not have any standardized meaning under IFRS and may not be comparable with similar measures presented by other companies. These non-IFRS financial measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

ATM quarterly update

During the fiscal quarter ended March 31, 2024, through the ATM, the company sold 435,405 common shares at an average price of $1.88 (Canadian) per share. The company received gross proceeds of $818,351 (Canadian), less aggregate cash commissions paid to Craig-Hallum of $24,551 (Canadian), resulting in net proceeds of $793,800 (Canadian). The common shares were sold on the Nasdaq Capital Market and the sales were denominated in U.S. dollars. The values disclosed are based on the average Bank of Canada exchange rate applicable during the reporting period.

About Poet Technologies Inc.

Poet is a design and development company offering high-speed optical modules, optical engines and light-source products to the artificial intelligence systems market and to hyperscale data centres. Poet's photonic integration solutions are based on the Poet Optical Interposer, a novel, patented platform that allows the seamless integration of electronic and photonic devices into a single chip using advanced wafer-level semiconductor manufacturing techniques. Poet's Optical Interposer-based products are lower cost, consume less power than comparable products, are smaller in size and are readily scalable to high production volumes. In addition to providing high-speed (800G, 1.6T and above) optical engines and optical modules for AI clusters and hyperscale data centres, Poet has designed and produced novel light-source products for chip-to-chip data communication within and between AI servers, the next frontier for solving bandwidth and latency problems in AI systems. Poet's Optical Interposer platform also solves device integration challenges in 5G networks, machine-to-machine communication, self-contained Edge computing applications and sensing applications, such as LIDAR systems for autonomous vehicles. Poet is headquartered in Toronto, Canada, with operations in Allentown, Pa., Shenzhen, China, and Singapore.

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